QuestionsQuestions (Republic Act No. 2264)
The budget must appropriate an aggregate amount not exceeding the estimated tax receipts and/or income for the ensuing year (certified collectible by the provincial/city treasurer, as applicable), must provide for statutory and/or current contractual obligations, must observe the salary cap (no official/employee higher than the maximum in subsisting salary laws/executive orders), and must be enacted by the proper local legislative body with the required approval for cities/municipal districts/municipalities; it becomes effective on the date fixed for its effectivity in the local ordinance/resolution.
The budget for the preceding fiscal year is deemed re-enacted.
Changes may be effected by supplemental budgets prepared and adopted in the same manner as the annual budget.
Within 10 days from approval, copies of provincial and city budgets must be submitted to the Secretary of Finance, who may review them to ensure compliance with the requirements (e.g., aggregate appropriations not exceeding estimated receipts, inclusion of statutory/contractual obligations, and salary limitations). If the Secretary does not act within 90 days, the budget is deemed compliant.
The Secretary advises the provincial/city treasurer. After receipt of the advice, it is unlawful for the treasurer to make further disbursements for items/purposes in question unless expressly authorized in the advice, or unless the budget is corrected/revised to meet objections and the correction/revision is submitted to and approved by the Secretary.
Within 90 days after receipt of the budget, the Secretary may declare it inoperative and return it to the governor/mayor for proper adjustment; then the LGU operates on the previous year’s budget until a new budget meeting the objections is made.
Copies must be furnished the Provincial Treasurer within 10 days. The Provincial Treasurer reviews for compliance; if no action is taken within 90 days, the budget is deemed compliant. If salary-law violations are found, the treasurer cannot disburse for questioned items unless corrected/revised and approved by the Provincial Treasurer (approval cannot be unreasonably withheld). If obligations are not provided for or appropriations exceed estimated receipts, the Provincial Treasurer can declare the budget inoperative and require adjustment, after which the LGU operates on the previous year’s budget.
They may impose municipal license taxes/fees, collect service fees/charges, regulate and impose reasonable fees for services connected with business/profession/occupation, and levy just and uniform taxes, licenses, or fees for public purposes—subject to limitations in the Act and other laws.
They may not impose: (1) any percentage tax on sales or other taxes in any form based thereon; and (2) taxes on articles subject to specific tax, except gasoline, under the national internal revenue code.
Examples include: residence tax; documentary stamp tax; taxes on the business of printing/publishing a newspaper/magazine/review/bulletin meeting the stated conditions; taxes on waterworks/irrigation/other public utilities except electric light/heat/power; taxes on forest products and forest concessions; taxes on estates/inheritances/gifts/legacies and mortis causa acquisitions; taxes on income of any kind; registration of motor vehicles and driving licenses/permits; customs duties/wharfage/tonnage/customs fees/charges; taxes on banks/insurance/franchise tax payers; and taxes on premiums paid to foreign insurance companies (as stated in the text).
A tax ordinance goes into effect on the fifteenth day after its passage unless it provides otherwise. The Secretary of Finance may suspend its effectivity within 120 days after passage if the Secretary believes the tax/fee is unjust, excessive, oppressive, or confiscatory.
The LGU may appeal to the court. During the pendency of the case, the tax levied is considered paid under protest.
Provincial boards may, upon favorable recommendation and conditions, exercise eminent domain for enumerated public purposes such as construction/extension of roads/bridges/ferries/levees/wharves/piers, airfields, public buildings (including schoolhouses) and improvements, parks/playgrounds/plazas/market places, artesian wells and water systems, irrigation canals and dams, nurseries/breeding centers, health centers/hospitals/cemeteries/crematories, drainage/cesspools/sewage systems, and abattoirs.
Municipal boards/city councils (cities) and municipal councils (municipalities) are authorized to adopt zoning and subdivision ordinances/regulations for their respective localities, subject to approval of the city mayor or municipal mayor, as the case may be. They may consult the national Planning Commission on planning and zoning matters.
Purchases must follow auditing rules and be made either locally or elsewhere without using the Bureau of Supply, but the price must not exceed maximum prices set by the Bureau of Supply. Purchases requiring scientific tests must first be sent to the Institute of Science and Technology and/or Materials Testing Laboratories and equipment must be referred to the Bureau of Public Highways/Public Works for specifications; those reports/specifications must be the basis for purchase. Purchases generally require public bidding and award by the specified committee; however, small purchases up to the stated thresholds may be done without public bidding after canvass.